With deflated Coalition MPs openly talking of defeat, the Prime Minister was reaching out last night to elements of the now seven-strong lower house crossbench upon which he must depend to govern for the remainder of the term.

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There is one more sitting week of Parliament left this year and only three weeks scheduled next year before the election, minimising the Coalition's exposure to the crossbench and Labor.

Julia Banks quits Liberals

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Ms Banks, who holds the marginal Victorian seat of Chisholm, cited what she believes is the Liberal Party's poor regard for women, the personal ambitions that drove the dumping of Malcolm Turnbull, and she echoed the complaints of fellow Victorians following Saturday's state election wipeout regarding the far-right policy direction of the party.

"The Liberal Party has changed. Largely due to the actions of the reactionary and regressive right wing who talk about and talk to themselves, rather than listening to the people," she said. She left open the prospect of contesting the next election as an independent.

Her defection leaves the government with just 73 MPs on the floor, ranged against 69 Labor MPs and seven crossbenchers. This also means Labor and the crossbench, when all are present, can achieve an absolute majority 76 votes in the floor, allowing them to progress private members bills, such as calling for a federal national integrity commission.

Home Affairs Minister Peter Dutton, who has batted away section 44 concerns regarding a potential pecuniary interest, also risks being referred to the High Court by a vote of a simple majority.

The government's internal unrest was further exacerbated by former deputy leader and leadership candidate Julie Bishop breaking ranks on climate change, telling The Australian Financial Review the government should do a deal with Labor and implement the National Energy Guarantee.

Ms Bishop doubled down on her call on Tuesday, telling an EY policy forum in Sydney that business, which backed the NEG and wanted policy certainty, was an important part of the Liberal Party base and "I would like to see us come up with a bipartisan position".

On the same day Victorian Premier Daniel Andrews unveiled a ministry comprising 50 per cent of women, Ms Bishop also backed Ms Banks' reason for quitting.

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"This does highlight the fact the Liberal Party needs and should have more female representatives," she said.

Cabinet minister Kelly O'Dwyer, a Victorian, told colleagues at a post-state election crisis meeting on Monday the Liberals were regarded as "homophobic, anti-women, climate-change deniers" thanks to the "ideological warriors" hijacking the party's positions on social issues.

Morrison's economic focus

Just as Ms Banks was announcing her resignation, Mr Morrison and Treasurer Josh Frydenberg informally launched the election campaign by announcing the budget would be brought forward a month to April 2 and the election called straight afterwards. This means the election will be held on either May 11 or the latest possible date, May 18.

Attempting to put the economy front and centre of the campaign, Mr Morrison boasted the budget would show a return to surplus but he would not say in which year.

The Australian Financial Review understands, however, the surplus will be announced for 2019-20. The May budget had predicted a return to balance that year of $2.2 billion but the number, due to surging tax revenues, will now be higher and eligible to be described as a surplus.

"We will be handing down a budget and it will be a surplus budget. It will be a budget which is the product of the years of hard work of our government," Mr Morrison said.

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David Rowe

"The next election is a choice between a stronger economy to pay for hospitals and services and education and schools and border protection and defence that Australia needs ... or higher taxes."

Mr Frydenberg also announced the Mid-Year Economic and Fiscal Outlook (MYEFO), which is the next budget update, would be released on December 17, which is right in the middle of Labor's national conference.

Despite billions of dollars in extra revenue that has been flowing into federal coffers, the government has previously said it had no intention of bringing forward the return to surplus and was sticking to its plan for a budget balance in 2019-20 and a surplus afterwards.

"The budget will be back in balance next year, after more than five years of very hard slog to get it back there," Mr Morrison told the Business Council of Australia last week.

On Friday, latest figures from the Department of Finance showed the budget almost $9 billion better off than previously forecast for the first four months of the financial year, due largely to strong corporate tax revenue.

The latest budget monitor from Deloitte Acess Economics to be released Monday shows that even after taking into account the extra spending decisions since the May budget, the 2019-20 balance of $2.2 billion forecast in May is now a small surplus of $4.2 billion.

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The forecast surplus of $11 billion for 2020-21 is forecast by Deloitte to be $14.1 billion. The deficit of $14.5 billion for this year is now forecast to be a $5 billion deficit.

Shadow treasurer Chris Bowen said Australia needed a change of government from the current "farce" to deliver stability and a a new agenda.

He said what mattered with the budget was not the timing but what was in it.

Phillip Coorey writes on news specialising in policy, politics and budget. Based in our Canberra newsroom, Phil is the Financial Review's chief political correspondent. He is a former chief political correspondent for The Advertiser and The Sydney Morning Herald, and a two-time winner of the Paul Lyneham award for press gallery excellence. Connect with Phillip on Facebook and Twitter. Email Phillip at pcoorey@fairfaxmedia.com.au

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